ROME – Every kid knows that bringing a report card home to the parents is, to a large extent, a challenge in framing things your way.

A disappointing C in English?

“Everybody knows Mrs. Smith is the toughest grader in school … that’s like an A from anybody else.”

A surprising B+ in math?

“It’s because of all of your help, dad. By the way, can we talk about my allowance?”

In that spirit, the Vatican did a heroic job yesterday of attempting to frame its latest report card from Moneyval, the Council of Europe’s watchdog unit on financial crime. It touted the positive things the Moneyval team had to say, including the construction of a legal framework now in accord with best practices and generally strong levels of international cooperation.

When it came to anything critical, a lengthy interview with Italian banker Carmelo Barbagallo, since 2019 the president of the Vatican’s Financial Supervision and Information Authority, described the findings rosily as “an encouragement to do even better” while also pointing out that even the Vatican’s lower scores, of only “moderate” effectiveness on six of eleven key measures, compare favorably to other states, including some which are much larger and more advanced financially.

All that’s fair as far it goes, and certainly the Vatican deserves credit for participating in the Moneyval process in the first place. When that decision was made under Pope emeritus Benedict XVI, it marked the first time the Vatican had subjected itself to independent outside review of its financial operations – a step away, in other words, from the Vatican’s historical fetish about protecting its own sovereignty.

(Granted, the Vatican didn’t have much choice. By now, any state that refuses to participate in such external reviews is likely to be viewed as a financial pariah, which could mean being frozen out of currency and investment markets or paying significantly higher transaction costs to cover the presumed risk. Nevertheless, the Vatican accepted reality and began overhauling its financial rules.)

Still, there are troubling elements of the Moneyval findings that can’t simply be spun away or chalked up to “areas for growth,” especially for a financial reform under Pope Francis that’s supposedly been underway for the better part of a decade.

For one thing, the Moneyval team found that the Vatican still doesn’t have an accurate grasp of the risk it faces. It’s properly identified the danger that its bank might be used to launder the proceeds of crimes committed by foreign entities, Moneyval said, but still under-values the risk of such crimes by insiders – i.e., mid-level and senior officials, including bishops and cardinals – seeking personal gain or some other benefit.

One financial regulator with whom I spoke yesterday said that’s a serious red flag.

“We live in a world of limited resources,” he said. “If you haven’t honestly identified the risks you face, then you can’t allocate your resources properly to deal with them. What people in my line of work want to know in looking at a report like this is, ‘Do they have an honest risk assessment, yes or no?’”

The most chronic source of frustration for Moneyval evaluators, however, is that the speed with which the Vatican has adopted new legislation hasn’t been matched by a similar aggressiveness in prosecutions.

If this were an episode of “Law and Order”, the Vatican probably would get an A for “law” but a D for “order.”

Moneyval found that the Vatican’s prosecutors office is short-staffed and inexperienced, and said it’s been slow to bring cases to trial. It also warned that because some Vatican prosecutors also practice law in Italy, they may have conflicts of interest and recommended hiring attorneys who work exclusively for the Holy See.

Only a handful of cases have been brought to trial over the last decade, the report noted, and also concluded that in those rare instances, the penalties imposed were so weak as to create no real sense of deterrence.

To date, not a single senior Vatican prelate, meaning someone at the rank of archbishop or cardinal, has ever been indicted for a financial crime. In the few instances in which lower-level figures have faced prosecution, for the most part senior clergy haven’t even been called as witnesses. Instead, what we’ve seen is generally the time-honored pattern of smaller fish taking the fall while top officials are insulated from blame.

Pope Francis recently took one step toward ending that pattern by stripping cardinals and bishops of immunity from criminal prosecution, but the capacity to do something still isn’t the same as actually doing it.

The Moneyval assessment comes as the Vatican continues to grapple with the fallout of its London property scandal, a $425 million debacle that’s seen several Vatican personnel fired and a pair of Italian financiers under indictment for allegedly charging excessive fees. While there’s a paper trail demonstrating the transactions were approved by two successive “substitutes” in the Secretariat of State, meaning archbishops, and by the Cardinal Secretary of State himself, to date there’s no indication any of those clergy are even under investigation, let alone likely to be charged with a crime.

Many years ago, I recall asking a veteran churchman what it would take to achieve a genuine Vatican reform.

“Heads on pikes up and down the Via della Conciliazione,” he responded, referring to the broad street in Rome that leads up to St. Peter’s Square.

“That,” he said, “they would understand.”

While perhaps a bit overstated, the point is well-taken: Until people see someone senior in the system held accountable for financial crime, the take-away is likely to be that the “reform” is sound and fury signifying relatively little.

With regard to London, the Moneyval report said suspects are expected to be brought to trial by summer 2021. It’s early summer 2021 now and, so far, no dates have been set for any court proceedings.

Safe to say people are watching … and, until then, the Moneyval grade for Francis’s financial reform probably can best be described as an “incomplete.”

Follow John Allen on Twitter: @JohnLAllenJr